Name of the Project
Jervois base metals project.
Location
About 17 km north-east of Orrtipa-Thurra (Bonya) community, in the Northern Territory, Australia.
Project Owner/s
KGL Resources.
Project Description
KGL plans to reopen the Jervois mine – a brownfield site previously mined for copper, lead and zinc.
A December 2020 prefeasibility (PFS) has demonstrated an economically robust project, with average production of 30 000 t/y of copper, 893 000 oz/y of silver and 8 600 oz/y of gold over an initial 7.5 year operating life.
The initial mine plan is largely based on the project’s Joint Ore Mineral Reserve Committee-compliant mineral reserve of 9.4-million tonnes at 2.41% copper, 32.9 g/t silver and 0.39 g/t gold, and involves openpit mining at the Reward and Bellbird deposits, as well as underground operations accessed through declines at these deposits.
The mill production rate is estimated at 1.6-million tonnes a year.
The processing flowsheet includes a single-stage crushing circuit, with a conventional semiautogenous grinding mill and ball mill grinding circuit. The flotation circuit will comprise roughing, cleaning and recleaning stages.
Potential Job Creation
An estimated 230 people will be employed during the construction phase and 300 during operations.
Net Present Value/Internal Rate of Return
The project has a pretax net present value, at an 8% discount rate, of A$177-million and an internal rate of return of 23.1%, with a payback of 38 months.
Capital Expenditure
Preproduction capital is estimated at A$200-million.
Planned Start/End Date
KGL plans to start development in the second half of 2021, subject to a final investment decision.
Latest Developments
KGL Resources announced plans on April 13 to raise A$24.2-million in a one-for-six nonrenounceable entitlement offer at 37c a share.
Up to 65.3-million shares will be on offer, with a minimum raising target of A$9.9-million set.
Two of KGL’s major shareholders, KPM Investments and Denis Wood, have advised the company of their intention to take up their full entitlement, raising a combined A$8.1-million.
The offer is expected to open on April 26 and will close on May 5.
Proceeds from the entitlement offer will be used to fund front-end engineering design work at the Jervois copper project and the final stages of the feasibility study.
“The feasibility study is nearing completion and while it has taken longer than initially expected, it has . . . [enabled] us to use an updated and improved resource as the basis of the mine plan, and also incorporate into our plant design the requirements of the Glencore agreement,” KGL executive MD Simon Finnis has said.
“It is considered likely that this will improve the feasibility outcomes.”
KGL has signed a binding offtake agreement with Glencore for all the copper concentrate to be produced at Jervois, and the evergreen agreement will have a minimum term of five years from the start of commercial production, with sale price for the copper concentrate to be volume-based and calculated with reference to the LME cash settlement price for copper, with silver and gold credits.
Key Contracts, Suppliers and Consultants
Xenith Consultants (ore reserve report); Entech (mining study); Mining Associates (resources); Pimo and KGL (mining analysis); Sedgman (processing); Knight Piésold and TMM; Balanace Advisory (marketing and logistics); and Core Metallurgy (metallurgy).
Contact Details for Project Information
Lithium Americas, email info@lithiumamericas.com.